NSLC Business & Entrepreneurship · University of Michigan
The Edge
Setting Your Idea Apart
Lecture 2 · Danny Ellis
A SkySpecs drone squaring up to a turbine — today is about squaring up to your market.
Before anything else… let me tell you a story
SkySpecs was at least 4 years ahead of every competitor at deploying robots in the wind industry. Sounds unbeatable, right?
Being first cuts both ways. Customers were extremely skeptical — they had nothing to compare us to. Nobody wanted to bet on us if we couldn't deliver.
And by the time we were delivering at scale, others took notice — offering “similar” services without the years of development costs behind them. Prices crashed.
Suddenly the fight wasn't being first anymore. It was defending our quality against cheaper copies.
Every competitive decision has trade-offs. How we navigated ours is exactly what today is about… →
Where we are
You have an idea. Today we make it unbeatable.
Last time: mindset → plan → idea → industry → research. You left Breakout 1 with one sentence — “We help [who] solve [what].” Today, six moves to give it an edge:
1 · Competition
Know who you're up against
2 · SWOT
Map your position honestly
3 · Advantage
Find what puts you ahead
4 · Value Prop
Say why you win, in one line
5 · Target Market
Pick who buys first
6 · Marketing Plan
Make them find you
Rubric alert: these six are the Competitive Analysis, UVP, Target Market, and Marketing Plan lines on the judges' sheet at the pitch competition. Today is worth points.
Move 1 · Competition
Competition is a good sign
Businesses compete for customers in a market: a potential group of customers — people or businesses — who are willing and able to purchase a particular product or service.
Willing and able. A broke superfan isn't a market. A rich person who doesn't care isn't either.
Competitors exist?
Someone is already getting paid to solve this problem. Competition is proof money exists.
“We have no competition”
Judges hear: either you haven't looked — or nobody wants this. Both are bad. Say who you beat and how.
Competition · Interactive
Two types of competition — click a matchup, then its bucket
Direct
Sells a similar product or service. Coca-Cola vs. Pepsi. McDonald's vs. Burger King.
Indirect
Different product, same customer need. Coca-Cola vs. Starbucks. McDonald's vs. KFC.
🥊 Direct
Similar product, fighting for the same purchase
🥷 Indirect
Different product, same underlying need
Competition · Case study
Who was SkySpecs really competing against?
Don't worry about direct competitors. A copycat is a compliment. Let them.
- Resources spent defending against copycats are spent looking backward. Keep looking forward — at the next step in value creation
- The competition that mattered was indirect. #1: customers choosing to inspect nothing at all — the status quo
- #2: the turbine OEMs promising “we'll fix whatever breaks” — the same problem, solved from a different angle
- Both were paths of least resistance. So we proved one thing: inspect early, act early, and total cost of ownership goes down
Move 2 · SWOT · Interactive
SWOT analysis — click each quadrant
💪 Strengths · internal / positive
What your business does well, from the inside: skills, assets, advantages you control.
Campus snack delivery: we live in the dorms — 10-minute delivery nobody off-campus can match; zero rent.
🩹 Weaknesses · internal / negative
What holds you back, from the inside: gaps in skills, money, time, experience.
Campus snack delivery: two founders with classes at peak snack hours; no cash for inventory.
🚪 Opportunities · external / positive
Outside forces you can ride: trends, new rules, gaps competitors left open.
Campus snack delivery: the dining hall now closes at 8pm; finals week is coming.
⛈️ Threats · external / negative
Outside forces that can hurt you: new competitors, rule changes, shifting tastes.
Campus snack delivery: DoorDash drops fees for students; campus bans dorm-to-dorm selling.
Memory hook: S & W live inside your walls. O & T live outside them.
SWOT · Why it earns its keep
Four things a SWOT actually buys you
Strategic planning
Align what you have (internal) with what's out there (external) — strengths pointed at opportunities.
Risk mitigation
Find the blind spots before they become crises. A threat you named is a threat you can plan for.
Competitive advantage
Your strengths list is where your edge is hiding — leverage the assets only you have.
Decision making
Pivot? Expand? Launch? A SWOT gives you a factual basis instead of a gut feeling.
Deeper dive · SWOT, but real
Year-one SkySpecs — the honest SWOT
- An extremely talented group of robotics engineers
- Naivety about how hard the wind industry would be (yes — a strength)
- Early access to capital to hire a world-class team
- The University of Michigan and all its resources
- Complete lack of sales expertise
- Zero industry contacts, no reputation
- No scaling experience. No people-management experience.
- Drone tech scaling fast — and regulations following
- Wind turbines beginning to age and show weaknesses
- Governments funding more wind development
- Cheaper tech lowering the barrier to entry for rival robots
- Running out of money… constantly. Losing time.
- Failing one big contract and wrecking our reputation
- Other forms of electricity outpacing wind
Which quadrant mattered most? Opportunities — recognized fast and attacked with our strengths. We overcame weaknesses by learning, hiring, and surrounding ourselves with people smarter than us. Threats were always there — we didn't defend against them, we outpaced them.
Move 3 · Competitive Advantage · Interactive
Your edge, on a grid — click cells to fill it in
Competitive advantage = something that puts your business ahead of the competition. A differentiator = the unique characteristic that distinguishes you from other businesses. A competitive matrix is how you find both: compare your characteristics with your direct competitors', factor by factor.
| 🫵 You | Competitor A | Competitor B | |
|---|---|---|---|
| Price | — | — | — |
| Quality | — | — | — |
| Speed / delivery | — | — | — |
| Customer service | — | — | — |
| Unique feature | — | — | — |
Click to cycle: ✓ has it · ★ best in market · ✗ doesn't have it. A column of ✓s with one ★ nobody else has? That ★ is your differentiator.
Competitive Advantage · Interactive
Ten classic sources of an edge — flip them. Which two are yours?
Move 4 · Value to Customers
Value is decided by the customer — not by you
Human-centered design: put the customer at the center of everything and work outward. Before you claim value, answer:
- 📖 What is your customer's story?
- 🧱 What problems do they face?
- 🔥 What are their pain points — the parts that actually hurt?
- 🛠️ What solution does your business hand them?
Value proposition = a short statement summarizing all the benefits a company gives its customers.
“Costs” isn't just price — it's time, hassle, risk, and switching pain. Shrink those and value grows without touching the price tag.
Deeper dive · Value proposition
The data nobody else could capture
SkySpecs' value proposition had two acts — and the second one built the company.
- Act 1 — first revenue: document, quantify, and qualify blade damage in a way that was scalable, repeatable, and mappable to the geometry of the blade. Nobody had ever done that before
- Act 2 — the scale-up: turn that data into better ownership — which damages cost the most, and how to fix them early
- That pulled us from blades → all major components → financing and repairs
- All of it stemmed from one root: capture high-quality data where it had never been captured or analyzed before
Move 5 · Target Market
“Everyone” is not a target market
Your target market: the specific group of consumers most likely to buy — defined by shared traits. Your ideal customer, described precisely enough to find them.
Aim at everyone and you hit no one. Aim at a specific someone and the message, the channel, and the product all get easier to choose.
Three questions to answer
1 · How large is it?
2 · Who is in it?
3 · How much do they spend?
Target Market · Interactive
Four lenses on your ideal customer — flip each one
Deeper dive · Interactive
Build your ideal customer — click the chips
🪪 Age range
🗺️ Location
💭 Interests
🛒 Buying style
Your customer persona
Pick one chip in each group and I'll write the persona sentence for you.
Move 6 · The Marketing Plan
Marketing = how you present your business to customers
Three jobs: create awareness, attract customers, and convince them to buy. A marketing plan = your goals + the strategies (your promotional mix) to hit them.
Short-range
Up to 1 year. Launch, first customers, first proof. This is where your pitch lives.
Mid-range
2–5 years. Growing share, new products, repeat customers.
Long-range
10–20 years. The empire: new markets, the brand everyone knows.
The Marketing Plan · Interactive
Goals only count if they're SMART
S · Specific
One clear outcome — not "do better"
M · Measurable
A number you can check
A · Achievable
Hard but doable with what you have
R · Relevant
Actually moves the business
T · Timely
Has a deadline
🔬 The SMART checker — click a goal, watch it score
Click a goal on the left to grade it.
The Marketing Plan · Interactive
The 4 Ps — flip each card. Your promotional mix lives here.
The 4 Ps have to agree with each other. A luxury product with a discount price in a gas station with no promotion? That's four answers fighting.
Promotion · Interactive
Old school or social? Sort the promotion strategies.
📻 Traditional
Broadcast out to the masses — you talk, they listen
📲 Social
Two-way and shareable — customers participate
Deeper dive · Retention
Keeping customers is cheaper than finding them
A repeat customer costs a fraction of a new one — and recruits friends for free.
Rewards programs
Buy 9, get the 10th free — give loyalty a scoreboard.
Special offers
Returning-customer discounts and early access — coming back feels VIP.
Thank-you notes
A personal note in a world of bots is unreasonably powerful.
Personal assistance
A human who knows your order — service worth staying for.
Automated services
Reminders, reorders, tracking updates — touches that run themselves.
Communities
Discords, run clubs, fan groups — customers who know each other stay.
The Marketing Plan · Scoreboard
If you can't measure it, you can't manage it
Key metrics = the numbers a business measures to tell whether it's succeeding.
Retention %
Share of customers who come back
Post views
Is anyone seeing your content?
Purchases
The number that pays rent
App downloads
Installed = interested (not yet sold)
Churn rate
The percentage of customers who stop using your product or service in a given period. The leak in the bucket — retention's evil twin.
ROI — return on investment
The ratio of net profit to the cost of the investment. Spent $100 on flyers, earned $300 profit from them? ROI = 3× — do THAT again.
Your assignment · Breakout 4
Three goals, one funnel — this is your marketing plan
Your team needs 3 marketing goals — one per funnel stage — each with a promotional channel and the key metrics that prove it worked.
1 · Awareness
Attention → Interest. They discover you exist and lean in.
Channel: where they'll first see you · Metrics: views, followers, reach
2 · Purchase
Desire → Action. They want it — and they buy it.
Channel: where the sale happens · Metrics: purchases, conversion, ROI
3 · Retention
Satisfaction. They come back and bring friends.
Channel: your retention strategy · Metrics: retention %, churn, repeat purchases
Every goal: SMART. Every channel: where your persona actually is. Build it in Breakout 4 — workbook marketing plan section.
Your mission
What happens next
Breakout 2
Competitive analysis + SWOT for your business — workbook p. 9. Name real competitors, direct and indirect.
Breakout 3
Your UVP + target market: the one-line value proposition and the persona with real numbers behind it.
TA Workshop
Presentations — how to actually deliver this on stage at the pitch competition. Your hook, your structure, your close.
The bar: leave Breakout 2 able to finish this sentence — “Unlike [competitor], we [your edge].”
The rest of the story
So how did we handle the cheap copies? We started a clock.
- ⏱️ When a cheap drone competitor swooped in to steal a contract, we'd joke: let them take it — and set a clock for 3 months.
- 📞 Right on schedule, the customer would call back — the quality wasn't up to par. And now we'd charge more, for last-minute work, to fix it before the season closed.
- 🤝 The high-quality competitors — the worthy rivals — became good friends. We helped each other make the whole industry better.
- 🏆 Which move won it? The differentiator — quality nobody could fake — and knowing the customer's real costs better than they did.
Ideas are common. Edges are built. Never fear the cheap copy — fear standing still. Go build the proof.